In the current day and age, it is rare to find a business that doesn’t accept credit cards as a form of payment, but a small group of businesses are still holding onto the old fashioned way of doing business. Unfortunately for those businesses, most consumers have recognized the convenience associated with paying with a credit card, and may not carry cash regularly. Many consumers may not even have a checkbook, and may only use checks to pay bills that can’t be paid through online bill pay services. In order for a business to stay relevant and competitive with similar businesses, it is quickly becoming a necessity to offer your customers the option to pay with a credit card for their purchases.
In the year 2009, 66.9 billion credit or debit card transactions were made. At the same time, 41% of businesses did not accept either credit or debit cards. These businesses were missing opportunities to sell products and goods to those customers who rely on their credit and debit cards to make their purchases.
Why Do Some Businesses Avoid This Convenience?
Most businesses that do not offer the ability to pay with credit cards cited the cost of doing so as the main reason against it. It is true that there are fees associated with hiring a credit card processing company. These fees are often assessed by the individual company and the specific credit card being used (Visa, MasterCard, etc.). But of the businesses that do offer the ability to pay using credit or debit cards, most assumed that it was just simply a cost of doing business. Most businesses also believe that offering these services gives them the opportunity to help more customers and makes the payment process more convenient and less painful for their employees and customers. In this way, they felt that their sales were increased.
It is a well-known concept that people will spend more when they use a credit or debit card than when they use cash. Credit cards allow a certain level of emotional detachment from the process of buying things. Consumers will swipe the card for more money than they will hand over to a cashier. This is another way that offering the option to pay with credit cards will increase sales for any business.
Benefits Of Accepting Credit Cards
The increase you will see in sales is not the only benefit you will get from offering your customers this option. Most businesses deal with at least one or two returned checks every month. This means that you are missing the money for the purchase, and you are charged a fee for the returned check. Even if you pass this cost onto your customer, you still run the risk of never seeing the money. Credit cards are processed immediately, and won’t be approved without authorization. With on the spot approval, you are guaranteed to receive your money quickly. Those who accept American Express merchant services don’t have to deal with the hassle of returned checks each month.
A large part of your business is based on the level of customer service that you offer to all those who come through your doors. When you accept credit card payments, you offer a more convenient shopping experience for your customers. With the best American Express merchant services, you increase the flexibility your customers have when paying for their goods. If a customer is inconvenienced when they come to your store, they may develop negative feelings toward your business.
Considerations When Choosing A Processor
If you make the choice to accept credit card payments from your customers, you will first need to find a service to handle the payments for you. It is important that you ask any questions you have up front and discuss any specific terms before you sign a contract. Approach this process like you would any other business partnership. Be patient and do your homework before you make your final choice. Make sure to compare American Express merchant services providers against each other to find the best one. Ask some of the following questions of your potential service providers:
• What fees are associated with your service? Be sure to ask about monthly and annual fees.
• Is there a cancellation fee if you are dissatisfied with the service?
• What is the time between when the payment is made and when the payment is in your account?
• What type of equipment will you need?
• Is there a separate rate for rewards cards, or is the rate the same for all card types?
• Is there a separate rate for debit cards?
• Can you keep your current bank relationships, or do they want you to use a specific bank or account?
These are just a small example of the type of questions you will want to ask your potential credit card processing company. Tailor your questions to the type of business you run.
Small Business Versus Large Corporations
You may be surprised at the range of prices and rates you find from different credit card processors. With larger corporations, you may get a lower rate or fee, but you may give up the personal service and face-to-face contact you can often get from a smaller business. Many of the larger providers also offer other solutions such as online bank deposit and small business startup loans which can be useful to your business. Smaller providers often offer better customer service and a more personal connection, but the fees are often higher. Picking the right processor is a matter of deciding what is most important for you and your business. Make a list of absolute necessities and another list of things you are willing to compromise before you start looking for the right service.
Ask For Referrals
If you own your own business, there is a good chance that you know someone who has been in your situation. Ask for referrals from friends and business associates that you trust for the company they use to handle credit card payments. Stick with businesses that have similar needs to yours in order to best tailor your service to your specific business.
A Win-Win Situation
Offering credit and debit card payments to your customers is a win-win situation. Your customers are offered the convenience and ease of paying with a credit card, and your business has a chance to improve customer relations and offer more flexibility in the way of payment. When your customers leave the store, everyone will be happy.